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The Week Ahead

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S&P HPI, Consumer Confidence, ISM, Pending home sales and NFP

Mon, Jun 29 2009, 07:28 GMT
by BBVA Bancomer Team

BBVA Bancomer

S&P Case-Shiller 20 Home Price Index (April, Tuesday 9:00 ET)

F: -0.6% C: P: -2.2%

Home prices are expected to drop for the 33rd month in a row as foreclosures continue and inventories remain high, prompting deep discounts to attract buyers. Nevertheless, the market for existing homes has experienced renewed interest in recent months due to increasing affordability, which will help to slow the pace of price decline. Looking forward, the level of inventories could remain high for some time, which could put further downward pressure on home prices.

Consumer Confidence Index (June, Tuesday 10:00 ET)

F: 54.3 C: 55.1 P: 54.9

After posting large increases for the past two months, consumer confidence is expected to remain fairly steady in June. Overall, consumer confidence remains well below its historical average of 96.4, illustrating that consumers’ economic outlook is weak. Nevertheless, the fact that consumer confidence is stabilizing at a higher level in 2Q09 than in the first quarter could indicate that we could see an additional increase in the consumption component of GDP.

ISM Manufacturing Index (June, Wednesday 10:00 ET)

F: 43.6 C: 44.0 P: 42.8

The ISM manufacturing index is expected to illustrate ongoing contraction in the manufacturing industry, but at a slower pace. The recent stabilization could indicate that we have reached a bottom in the industry’s rapid contraction, but demand would need to be restored before we could see a recovery.

Pending Home Sales (May, Wednesday 10:00 ET)

F: 1.1% C: 1.1% P: 6.7%

Pending home sales are expected to signal further pick-up in the market for existing homes by rising for the fourth month in a row. The increasing affordability of houses due to deep price discounts, favorable mortgage rates and the tax credit for first time buyers are attracting new and experienced homebuyers alike. As a result we expect existing home sales to increase further in the months to come.

Non-Farm Payrolls (June, Thursday 8:30 ET)

F: -385K C: -365K P: -345K

After falling significantly for the past two months, the change in non-farm payrolls is expected to rise slightly to -385K from -345K reflecting the ongoing weakness in the labor market. Although the number of job losses have just about halved since the peak in January, they still remain at a high level as businesses continue to cut their labor force in response to feeble demand. The weak labor market could hold growth in the consumption component of GDP to a slow pace.

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Published on  Mon, Jun 29 2009, 13:44 GMT